Peter Meeus Addresses Antwerp Rough Controls

Peter Meeus is the managing director of Belgium’s Hoge Raad Voor Diamant (HRD). The HRD is an official government recognized organization that manages and controls Belgium’s diamond imports and exports. It also plays a very important role in working with the government to develop and promote Belgium’s diamond industry.

Martin Rapaport: How is the Antwerp market? Is it affected by the slowdown in the U.S. market?

Peter Meeus: The market is a little bit pessimistic and we see that here at the Vegas Show as well. People have realized that they will not reach the same level of sales as last year. I think that a lot of people would be happy if they reached the same level as last year minus 15 percent, which is the decline predicted by De Beers. On the positive side, we feel an increase in our promotional efforts. People are really reaching out wherever they can to compensate for the decline in the U.S. We have many applications to visit all the trade fairs. For example, at the Dubai Fair there were many participants from Antwerp. We feel there is big potential in the Middle East even though the situation there is fragile.

MR: How are the rough markets in Antwerp? Has there been a decline in goods from De Beers? Have supplies of outside goods declined?

PM: There is a general decline in goods from De Beers, as well as the other main players that brought smaller sights to the market. During the first six months, we saw a decline of 17 percent.

MR: What is the level of outside goods and where do they come from?

PM: Roughly $430 million a month with the larger imports from Angola, Congo, South Africa, Guinea and the Central African Republic.

MR: What about Liberia and the Congo?

PM: Over the last 12 months imports from Liberia were marginal; they probably didn’t even reach the volume of one sight from one client and they have now shrunk to nothing. In 2000 imports from the Congo declined by 20 percent because the rough went to Israel’s IDI. Now the Congolese government has opened the market again.

MR: What is Antwerp doing to control the flow of conflict diamonds?

PM: We launched our proposal in January 2000 two months before the Fowler report. At that time people were not interested in solutions, they were interested in problems. The basic idea was to solve the problem at the source. In those days there was still a strong belief among the few NGOs and others dealing with the conflict diamond issue that it was possible to identify the source of diamonds at the end of the pipeline. They thought you could just put the diamond in a machine and see where it came from. I think over the past 18 months the scientific research has proven that this cannot be done properly now.

We said in January 2000 that the only way to solve the problem was at the source, using a step-by-step approach and by verifying the source of diamonds from vital countries such as Angola, Sierra Leone, and Congo, and then closing the net by verifying diamonds from all the diamond exporting countries in Africa.

We started in Angola and Sierra Leone and it’s really a simple thing. We bring our infrastructure there. We scan the diamonds digitally and take their picture. The diamonds are sealed. There diamonds are accompanied by a new certificate of origin — which is not falsifiable. This is very different from what was done before. Information is digitally passed on to Belgium with the pictures so when the diamonds arrive there is a control and verification that the seal is okay. We can verify that this is the same parcel that left the exporting country. This is the beginning of a really good control system that assures a chain of custody that cannot be broken.

Now you might be concerned that this does not prohibit transshipping exports through other countries. As we said from the beginning this is a step-by-step process where we first start with the countries with significant problems and then close the loopholes by creating exactly the same system in all of the countries. It should be clear that the diamonds are entering the system of government controls as it is the governments of mining countries that give export certificates. If governments issue improper certificates, the government is breaking international law — and this government is then open to international sanctions. Such governments would be taking a very huge risk. So I think it’s a system that can be enacted in all the diamond exporting countries in Africa. It should be able to solve a big part of the problem.

MR: What countries are currently using the system of rough controls?

PM: Angola from February 2000. Sierra Leone from October 2000. The Congo signed a protocol in April 2001 and their system should be implemented by mid-July. Guinea started in June 2001. We are also currently studying a draft of a protocol with the Central African Republic. We are in negotiations with other African countries but have not yet reached any formal agreements.

MR: The UN has just issued a resolution regarding rough diamonds from Liberia. What is Antwerp doing about that?

PM: It was implemented immediately. If there is an embargo of the UN there is a direct and immediate implementation into Belgian law. Our system of licensing diamond importers and exporters allows us to directly control diamond imports and immediately implement UN decisions.

This is very different from the situation in the United States. For example, there was an embargo against conflict diamonds from Sierra Leone in July. In Belgium it was applicable immediately the day after the UN decision. Goods were immediately blocked in the diamond office. In the U.S., however, the sanctions only became effective in January — six months later — when President Clinton activated the embargo against Sierra Leone.

MR: What is the relationship between the laws of the European Union ( EU) and Belgium? Is this a problem that makes it difficult for Antwerp to implement rough controls?

PM: No. We apply the Belgian system and the Belgian law. We believe that it is in the best interest of everybody involved to find a solution for this problem and that we keep applying the Belgian laws.

The EU foresees free movement of goods. The Belgian government is clearly not prepared to abolish all controls of diamonds without thinking of the possible consequences including our need to help solve the problem of conflict diamonds. I think the EU is fully concerned about the conflict diamond issue. They are in line with what we are doing and looking to create one system of control for the whole of Europe.